"VIETNAM CAN COMPLETELY BECOME THE LOGISTICS HUB OF THE REGION"

"With the efforts of the Logistics enterprises, Vietnam can completely become the Logistics Hub of the region and can be competitive with Thailand, Singapore, Malaysia,..."

 

- What is the US-China trade war bringing to Vietnam Logistics market from you point of view?

 I think that Vietnamese enterprises are benefiting from the US-China trade war in many ways. The shift of the supply chain and production in Vietnam is the opportunity for the manufacturing and import-export enterprises. Along with that is the demand for transportation and Logistics for the Logistics enterprises.
In addition, due to the shift of the supply chain, Vietnam is increasingly becoming the choice of global manufacturers to build their production bases in Vietnam. This is an opportunity for Vietnam to become a Hub of the region based on this customer base.
 
In the past, the import and export enterprises had to transfer their goods through the transshipment points of Singapore, Thailand and Malaysia…, but in the near future, we expect that the products produced in the region will use Vietnam as a consolidated and transit point as per customers' requirements (Due to the main production output of customers at Vietnam production base).
In addition, Vietnam is currently the leading producer and exporter in the region in terms of Apparel, Footwear, Furniture, Electronics, Fisheries, Agricultural Products, ... with this production platform, Vietnam will be selected as a regional transit / consolidation point for supply to the market.

With the efforts of the Logistics enterprises, Vietnam can completely become the Logistics Hub of the region and can be competitive with Thailand, Singapore, Malaysia, ...
In order to make it happen, we need to solve some barriers to infrastructure, procedures, costs ...

One of another note is the competition getting stronger  because some regional Logistics enterprises, especially Chinese Logistics enterprises with strong potential join Vietnam market to serve the shift of the production. This will be the issue that Vietnam Logistics enterprises need to prepare.
We have seen this trend as more and more Chinese Logistics enterprises recently visit and research Vietnam market. This has not happened before.

- What are the challenges and opportunities that the Logistics Enterprises in general and ITL Corporation in specific are facing now? (Especially in the context of the US-China trade war and Vietnam has just signed a Free Trade Agreement with the European Union (EVFTA))
 
Our challenge is how Vietnam Logistics Enterprises can participate in the global Logistics value chain. This is the question that Vietnam Logistics enterprises need to answer, and for ITL, we aim to solve this problem in the next 5-year development plan.
Currently, ITL cooperates with some global Logistics enterprises as Joint Ventures and Affiliates including both the traditional Logistics enterprises such as: CEVA Logistics, Mitsubishi Logistics, Keppel Logistics, UPS SCS, ... and the Digital Logistics enterprises such as: FlexPort, SEKO Logistics,… We need to answer the question: Where is ITL's role and segment in the global value chain? Then we will focus on our best resources for the segment that cannot be replaceable.

The market openness, thanks to the free trade agreements signed, is the both opportunities and the challenges for the domestic Logistics enterprises. The dynamic development of the Logistics market in the recent years is evidenced by the growth of both export and import flows (Including domestic materials and consumer goods). And soon, we hope to start seeing the growth of goods Transit when Vietnam becomes the regional transit Hub. This is the opportunity for Vietnam Logistics tenterprises.

 

The market has grown but the constrain infrastructure is the challenge that the Logistics enterprises will face.
The challenge is that the infrastructure problem cannot be solved in a few years but it will take more time. So this will be a concern when the market demand continues growing due to the openness of the free trade agreements that will come into effect in the coming time.
 
A typical example is that Tan Son Nhat Airport and a cargo terminal can meet the demand for aviation growth in Ho Chi Minh City for both international traffic (> 12% growth/ year) and domestic traffic (> 25% growth/ year) or not? This question is a difficult problem for the Logistics enterprises that depend heavily on the infrastructure.
This is also the barrier for Vietnam to become the regional Logistics Hub if we have this orientation.
2-digit growth of 14% -16% of Vietnam Logistics market is an opportunity, but this opportunity is not shared  equally for the enterprises, for the enterprises that well prepare and transform will receive more. ITL has been transforming for the 2nd time (2018-2023) with the goal of being a National Champion.
One of the direction that the enterprises need to pay attention for the competition is SMART Logistics. This is an open question and there will be no common answer for all Logistics enterprises (Based on the different capability of each enterprise).
 
For ITL, we are learning and trying to define the model that best suits us to meet this orientation. Certainly, technology is an integral part together with other important ones. And what else?
 
- What is the current trend of Vietnam Logistics industry and what is your point of view about this trend as a CEO?

The role of the local enterprises with the advantages of infrastructure investment will contribute to the Logistics value chain. The trend of Cooperation also increases the efficiency and help to utilize the resources of Logistics enterprises and this is very good for the market.

 About Connection, the requirement to change of the infrastructure (Effective infrastructure connection) is the key for Vietnam to develop sustainably (Reducing the Logistics costs for the economy)
Vietnam also cannot become a Logistics Hub in the region without solving the Bottle Neck  on the infrastructure and in-efficiency, making the cost higher than other Hubs in the region.

- ITL Corporation -